Nottinghamshire County Council and Funding Circle have launched the Local Business Lending Partnership, a pioneering new scheme, to stimulate local economic growth and employment through improved access to business finance.
As part of the scheme, the Council will lend directly to businesses based in Nottinghamshire using Funding Circle, the UK’s largest online marketplace where people directly lend to small businesses.
Initially the Council is investing £45,000 through the scheme, with the likelihood of more if it is successful in stimulating business growth.
The Council will join the thousands of British people already lending their money to small and medium sized businesses across the country. A potential model for the future of small business lending across the region, this pilot scheme will help realise the growth potential of Nottinghamshire businesses that are currently being stifled by poor access to finance.
Councillor Diana Meale, Chair of Nottinghamshire County Council’s Economic Development Committee, said: “We have listened to the needs of businesses across Nottinghamshire and they have stressed to us how the lack of practical and affordable finance is preventing further growth.”
“We made a commitment in the development of the Nottinghamshire Growth Plan to review peer-to-peer lending and we are delighted to have forged this partnership with Funding Circle. We will be reviewing its progress and initially, we will be seeking to make investments into established Nottinghamshire based businesses with a credible proposition and a viable business which meet the overall criteria.
“We hope to support some 35 businesses over this initial investment period and we’d encourage all Nottinghamshire businesses seeking finance to grow and create jobs to explore the options available via the Funding Circle website.”
James Meekings co-founder of Funding Circle said: “This innovative partnership will see Council funds injected into the heart of the business community in Nottinghamshire, helping to drive growth and create jobs at an important time. In today’s economy, businesses need to access finance as quickly and easily as possible.
“This new partnership between Funding Circle and Nottinghamshire County Council will give businesses a faster way to access finance, freeing them to continue growing and fulfilling their potential.”
Launched in August 2010, Funding Circle enables businesses to access finance independent of their banks and British people to earn attractive, stable returns for the long-term.
Businesses receive finance in a matter of days compared to up to three months for a traditional bank loan.
To date, more than £120 million of loans have been lent to small businesses across the UK. To be eligible, businesses must have a minimum turnover of £100,000 and have been trading for at least two years.
Nottinghamshire County Council becomes just the fourth local authority in the UK to partner Funding Circle – joining Camden, Gloucestershire and Lancashire County Councils participating in the scheme. Funding Circle expects a total of ten councils to join the Local Business Lending Partnership over the next 12 months.
Funding Circle works by enabling established and creditworthy businesses to borrow money from groups of people and institutions.
Once businesses pass Funding Circle’s credit assessment processes, their loan is posted on the marketplace. From here, people choose which type of businesses to lend to, and bid the amount of money they wish to lend, and the interest rate they want to earn. Investors can bid small amounts, from as little as £20, on lots of different businesses to spread their risk.
Source: Notts County Council